Hiring Makes Steady Progress, but Falls Shy of Expectations; Eases Pressure on Interest Rates
July hiring fell short of expectations, but when viewed alongside the steady decline in initial unemployment claims, the trends point to a resilient and steadily improving employment market. With the expansion of payrolls last month, the economy remains on track to add about 2.5 million jobs in 2013, easily outpacing last year’s total. The solid, though unspectacular, pace of hiring in July will also reduce suspicion that the Federal Reserve will intervene and prematurely end its bond buying programs.
U.S. employers added 162,000 jobs in July, primarily in private-sector industries with eight of 10 sectors adding workers last month. Gains were led by professional and business services, together with trade, transportation and utilities. Manufacturers added to the momentum, creating 6,000 jobs in July following four months of losses. Automakers continue to report strong sales, which will sustain production and employment along their supply chains in the coming months, while a rise in an index of manufacturing activity indicates that a broad array of industries are performing well. Education and health services, a consistent source of job creation throughout the recession, grew by 13,000 workers last month, helping to offset small drops in construction and other services.
The steady improvement in the job market continues to buoy the mood of consumers and is supporting job growth in several sectors. Higher consumer confidence and a consistent rise in consumer spending is generating more trips to shopping centers and malls, contributing to a gain of nearly 47,000 retail positions last month and 187,000 positions year to date. Consumers are also eating out more frequently, helping generate an additional 38,400 jobs at bars and restaurants in July and nearly a quarter of a million posts thus far in 2013. Hotels have also added 9,900 workers year to date as travel volume and room demand grows.